The power of renters in the multi-residential market

With private renters now accounting for 26% of all households, savvy builders realise that those who pay the rent can now be more selective about where they live and many want more than just a place to rest their head.

Even owner-occupiers often have more to choose from, which means buildings will have to offer more to appeal to the right kind of tenants and potential buyers.

Meet Trevor, the lifestyle manager

In Melbourne, as rental markets become more competitive, added building amenities have become commonplace with increased ground-level hospitality and retail offerings being inserted into more multi-residential developments.

Melbourne property developer Oliver Hume has led the pack with their Nord Apartments in North Melbourne. A suburb made up of 41% independent youth, according to realestate.com.au data, Oliver Hume designed Nord to appeal primarily to young professional millennials – many of whom are renters.

Nord’s facilities include a rooftop garden with CBD views, a lounge, TV, cool room fridge, dining space and electric bikes. But as the main point of difference to other apartments on the market, Oliver Hume have hired a ‘lifestyle manager’ to provide a concierge-like service for the residents.

Inside the Nord Apartments in North Melbourne.

The focus on lifestyle and community at Nord came out of research from the Insight Centre which found three out of four millennials would rather spend their money on experiences over consumer goods.

(Renters) are looking for ways to make themselves more efficient so they can spend more time socialising with friends and family.

The Nord apartments have all been sold, but the open house – a pop-up event featuring vendors from local cafes and retailers – was held specifically to help the investors find a tenant. Investors account for around 70% of all buyers.

A group of friends grabbed a free coffee, and a chance to view the new Nord development.

Attendees were able to try North Melbourne’s renowned Auction Rooms coffee, doughnuts from Melbourne favourite Short Stop, gelato from nearby Pidapipo, as well as rent a bicycle from Fitzroy’s Humble Vintage to take for a spin and further familiarise themselves with the neighbourhood.

“We can only do so much with our building and our amenities that our lifestyle manager offers, but it’s also about North Melbourne undergoing significant change in the last few years, which makes it makes it no ordinary place to live,” says Jason Wood, Development Director at Oliver Hume.

A prospective tenant takes advantage of the gelato stand at Nord’s open house.

Those inspecting apartments on the day were able to meet lifestyle manager, Trevor, and talk to him about the types of services he will offer them.

Video: Developers go above and beyond

As well as managing building facilities and being the face to greet tradespeople and accept deliveries, Trevor runs an online community hub scheduling everything from yoga classes to Friday night drinks.

“Renters are looking for those add-ons to make their life simpler and that’s a point a difference that we’re looking to make in the marketplace,” Wood says.

“I think everyone’s lives are busy and people are more and more placing importance of personal time rather than spending the weekend doing chores and shopping. They’re looking for ways to make themselves more efficient so they can spend more time socialising with friends and family.

“(The lifestyle manager) helps us distinguish our project from others in that location, or any other location for that matter.”

More than 100 applicants registered their interest to lease an apartment at Nord’s open house for renters, which Oliver Hume handed directly to their investors.

“The importance of it for us is to assist our investors in securing a tenant for their property,” Wood says.

“Renters are more discerning now, they’re not just looking for a place to rest their head at night. By offering these services we’re expecting that our investors end up with tenants that stay for longer durations,” he says.

Renters are occupiers too

Another Melbourne developer, Milieu Property, has a different approach – they design primarily for the owner-occupier.

In developing for the owner-occupier they say they are making apartments that are intrinsically attractive from an investor perspective, because renters want to live in them.

Inside ‘Nth Fitzroy’ by Milieu.

“They (renters) are still occupiers…if we develop with the owner-occupier in mind, the apartment will be more attractive to occupiers generally,” says Michael McCormack, of Milieu Property.

So, what does a building designed for the occupier look like? At Nth Fitzroy by Milieu, one of the developer’s latest inner-city projects, it means a smaller scale building with bigger apartments.

“They are bigger than most apartments, they’ve got more attention to detail, more storage … the things we know owner-occupiers value,” McCormack says.

“Lots of investors look at price point vs rental yield. Smaller apartments might be easier from a price point perspective, but they won’t receive the same yields that something aimed at an owner-occupier would.

“The building (at Nth Fitzroy by Milieu) itself is quite unique. It’s got a beautiful facade that is basically a curtain of operable metal shutters.”

The unique complex also has a seven-star energy rating, something any end-user would appreciate.

The external shutters provide privacy and filtered light to residents.

But the main thing Milieu were conscious of in designing and selling their North Fitzroy offering, is the location itself. They wanted to show potential residents why Milieu fits with the local landscape, not works against it.

“People don’t buy a building just because they like the building. They buy into an area because they like the culture, the open spaces, the general feel (of the area),” McCormack says.

“So selling a lifestyle is really important. We can’t place our buildings anywhere without considering the social context first.”

The highest demographic sub-group in North Fitzroy are young independents (24%) followed closely by maturing and older independents (23%), according to realestate.com.au data.

Both groups value a strong cafe and restaurant scene, something the Fitzroy/Collingwood precinct is known for, which is why Nth Fitzroy by Milieu will also own and operate a café on the lower level of the building.

“A lot of apartments have space at the bottom of the building that’s been forgotten about, we thought ‘let’s turn that into a positive and curate the space for hospitality’… with the café, we’ll still be contributing the local area long after settlement,” McCormack says.

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